Inside this issue:

Update on Well

Activity

1

What is it? 2

Integration Cases 2

IDAPA 20.07.02 2

Gem County

Informational

Meeting

3

2017 Proposed

Legislation

3

Repeal of IDAPA

20.07.01

4

Production Data 4

O&G Term 4

OGCC Annual

Report

5

SOGRE Report 5

O&G Production

in Surrounding

States

6

Second, Third & Fourth Quarter 2016 Volume 3 Issue 2/3/4

State Insect

Monarch Butterfly

Southwest Idaho

Two wells in Payette County were plugged and abandoned in mid-October. Alta Mesa Services sub-

mitted a Notice of Intention to Plug and Abandon for DJS Properties #1-14 and Smoke Ranch #1-21

in September. After the appropriate comment period and notifications to Idaho Department of Wa-

ter Resources (IDWR) and Payette County, the applications were approved October 3.

Sundry Notices for workovers and recompletions on the Kauffman #1-34 and Kauffman #1-9 wells

were submitted by Alta Mesa Services on August 23. Work was completed in September and Well

Completion reports for both wells were filed November 4. Both wells are back in production.

The permit for State #1-16 expired December 3, 2016. No extension was requested and the per-

mit was therefore cancelled.

Eastern Idaho

The Udy #18-1 well approved in March 2016 has not been drilled and Idaho Department of Lands

does not have an expected spud date. This past summer, CPC Mineral, LLC submitted Applications

for Permits to Drill for Federal #18-2 and Federal #20-3 in Bonneville County. Both wells have a

proposed depth of 7,000 feet.

After the appropriate comment

period and notifications to IDWR

and Bonneville County, Federal

#18-2 was approved on September

29. Federal #20-3 was withdrawn

and resubmitted as a Directional

Deviation Application on October

20. It was approved November 10

after the appropriate comment

period and notifications.

Both Federal #18-2 and #20-3

wells are located on BLM mineral

lands and applications for drilling

permits are also required through

the BLM. The BLM approved the

drilling permit for the Federal

#18-2 October 24. The permit for

Federal #20-3 was deferred by the

BLM pending the receipt of a flood

plain permit from Bonneville

County.

Update on Well Activity

Approximate locations of Eastern

Idaho Proposed Wells

Page 2

What is it?

Test your knowledge! Based on information presented in past newsletters,

what is the object in the picture on the right??

____________- Use of a scraping device for cleaning and testing petroleum

and natural gas pipelines, or to separate different throughputs in a pipeline.

Rulemaking–IDAPA 20.07.02-Rules Governing Conservation of Oil and Natural

Gas in the State of Idaho

The Idaho Legislature will consider a pending rule for

20.07.02 in January 2017. Idaho Department of Lands (IDL)

went through an extensive negotiated rulemaking process

over the past several months.

Numerous participants were present for the Negotiated

Rulemaking public meetings held for the 20.07.02-Rules

Governing Conservation of Oil and Natural Gas in the State

of Idaho. IDL put on seven rulemaking meetings from May

thru July. Community members from Ada, Gem, Payette,

and Washington Counties attended. In addition, representa-

tives from the Idaho Department of Environmental Quality,

Idaho Conservation League, Idaho Association of Counties,

Idaho Organization of Resource Councils, and the oil and

gas industry were present.

The comment period for negotiated rulemaking ended on

August 1, the Proposed Rule was presented to the Oil and

Gas Conservation Commission at the August 23, 2016

Commission meeting as an information item. The Proposed

Rule was then published in the October 5th Administrative

Bulletin, and a 21 day comment period followed. A public

hearing was held on October 12, 2016 at which three peo-

ple provided testimony. IDL received 59 written public

comments on the pending rule and one from IDL staff. The

Pending Rule was presented to the Commission in Novem-

ber for approval to submit to the 2017 legislature. The

Commission voted to adopt the pending rule.

For more information, please visit: https://

www.idl.idaho.gov/rulemaking/20.07.02/index.html

2016 Oil and Gas Integrations

Answer found on bottom of page 3

Two Integration Applications were approved last summer. In May, AM Idaho submitted applications for integration for Sec-

tions 14 T8N R5W and Section 19, T8N R4W, Payette County which were assigned Docket Numbers CC-2016-OGR-01-

001 and CC-2016-OGR-01-002. These were the first Integration Hearings following the passage of Senate Bill 1339. The

new statute gave the Department thirty days to hold the hearing, which occurred June 16, with a Continuance Hearing held

July 19. No uncommitted mineral interest owners, unleased parties or opponents to the applications appeared at the hear-

ings. Orders Granting the Applications for Integration were sent out on August 2, 2016. No appeals or objections were

received.

Three more applications for integration and spacing were submitted by AM Idaho on November 17. (Docket No’s CC-

2016-OGR-01-004, CC-2016-OGR-01-005 and CC-2016-OGR-01-006). The hearing for these applications took place

December 14 and 15. The spacing request for Dockets 004 and 005 described a 640-acre gas unit shifted to encompass

portions of more than one government section. The unit request in Docket 006 was for a smaller 480-acre gas unit in the

West ½ and W ½ of the E ½ Section 13, T8N R5W Payette County. The hearings for Dockets 004 and 006 were con-

cluded during the two days, but the record remains open for Docket 005 pending additional information. The Director will

issue a written decision within 30 days of the hearing.

Page 3 Volume 3 Issue 2/3/4

Oil and Gas Informational Meeting in Gem County

Director Tom Schultz gave an informational presentation on oil and gas to Gem County residents on Tuesday, June 28, at

the Emmett Middle School. The Gem County Commissioners and Senator Steven Thayne invited the Director to speak.

More than 100 people attended the meeting. The Director presented for an hour and then took questions from the audi-

ence for more than an hour.

IDL provided copies of information sheets on Integration, Split Estates, and Hydraulic Fracturing. A copy of the Power-

Point presentation is posted on the IDL website.

Gem County is considering land use requirements for oil and gas production in a proposed ordinance. If passed, it will be

similar to the ordinance passed by Payette County.

Above: Director Tom Schultz giving his presentation

Below: Senator Steven Thayne addresses

the crowd

The Commission approved two oil and gas bills to go be-

fore the 2017 Legislative Session.

In July, the Commission gave approval for IDL staff to pur-

sue possible legislation for three identified oil and gas relat-

ed topics. During the process, staff discussed the draft bills

with the Commissioners, stakeholders, and had a public

comment period.

At the September 15, 2016 Commission meeting, IDL staff

presented the draft language for the proposed legislative

ideas.

The first proposed bill would modify the procedures for

administrative permit review and approval, and the proce-

dures for processing applications that require a hearing and

result in a final order.

A second proposed bill would allow Idaho to join the Inter-

state Oil and Gas Compact Commission (IOGCC) as a full

member. With the start of commercial oil and gas produc-

tion over the last year, we are now eligible for full member-

ship.

The Commission chose not to move forward with a third

proposed bill which would have clarified and modified the

timeframes and types of record exemptions related to oil

and gas conservation.

The Commission approved the Administrative Procedures

bill and the IOGCC membership bill to be submitted to the

Division of Financial Management on September 16th. An-

other comment period occurred and more meetings with

Commissioners and stakeholders took place. The Adminis-

trative Procedures bill was modified and went again before

the Commission at the October meeting. The modifications

to the bill were approved and both the Administrative Pro-

cedures bill and the IOGCC bill were submitted to Legisla-

tive Services Office and will go before the Legislature in

2017.

2017 Proposed Legislation

Answer to What is it?- Pig (Pipeline pigging device) http://www.pipelinepig.in/oil-gas-pipeline-cleaning-pigs.html#oil-cleaning-pigs-with-z-type-brush

Oil and Gas Term— Dual Completion

The completion of a single wellbore into two separate pro-

ducing formations or zones at different depths. In most cas-

es, two separate tubing strings are used to isolate each zone

and provide the necessary level of control and monitoring for

the production from each zone. This allows for the hydro-

carbons to be measured and produced separately. Typically,

dual or multiple completions are used in areas where drilling

costs are very high or surface locations for drilling wells are

limited. The economics of using dual or multiple completions

can be attractive, however the operating and workover costs

can be high and must be considered when planning for a dual

completion.

Sources: AAPG-Wiki, Lewis Mosburg’s Oil & Gas Newsletter, Williams &

Meyers Manual of Oil and Gas Terms, Schlumberger Oilfield Glossary.

Repeal of IDAPA 20.07.01- Rules of Practice and Procedure Before the Idaho Oil

and Gas Conservation Commission

The public now has access to well production to date for

six wells in Idaho, which can be found at idahogeology.org,

and a link to the Idaho Geological Survey site is also on

IDL ‘s oil and gas regulatory webpage. Two of the wells

are dually completed and each completion has its own pro-

duction data. Both sections of data are released for ML

Investments #1-11. Only one section (Upper Zone) is cur-

rently released for Kauffman #1-9. Data is also being re-

leased for the State #1-17, ML Investments #1-10, ML In-

vestments #2-10 and Kauffman #1-34 wells. Production

records for ML Investments #1-3 and ML Investments #2-

3, and the Lower Zone for Kauffman #1-9 are scheduled

to be released during the Spring of 2017.

Between initial production and November, the non-

confidential data for the six producing wells show a com-

bined total production of approximately 3.4 billion cubic

feet of gas (BCFG), 100,000 barrels of condensate (BC)

and 118,000 barrels of natural gas liquids (BNGL).

Production Data Released

In January, the Legislature will review and vote on the repeal of IDAPA 20.07.01.

At the July 21, 2016 Commission meeting, the Commission directed the Department to enter the rulemaking process for

the repeal of IDAPA 20.07.01,The Rules of Practice and Procedure Before the Idaho Oil and Gas Conservation

Commission. These rules were superseded by the Idaho Administrative Procedure Act (Chapter 52, title 67, Idaho Code)

and Idaho Rules of Administrative Procedure of the Attorney General (IDAPA 04.11.01). This year’s Senate Bill 1339 also

contained several changes to administrative proceedings for the Oil and Gas Conservation Commission. As a result,

20.07.01 no longer governs actions by the Commission. The repeal of the IDAPA 20.07.01 rules will reduce confusion

regarding administrative and hearing processes. It will also save money, as the Commission pays a yearly fee for rules that

are in effect. There were no requests to have negotiated meetings or a public hearing on the repeal of this rule. At the

September 15, 2016 Commission meeting, the Commission approved to repeal the 20.07.01 rules and go into Pending

Rule Status.

The Pending Rule Notice was published in the November Administrative Bulletin.

Page 4

Oil and Gas Conservation Commission Annual Report

Page 5 Volume 3 Issue 2/3/4

SOGRE Report

The Oil and Gas Conservation Commission has released its first annual report. Previously the annual statistics for oil

and gas regulatory was covered in a small section within the Idaho Department of Lands Annual Report.

With increasing commercial production of oil and gas, it was time for the Commission to have its own annual report,

recording the history of this new industry in the State of Idaho.

Annual reports traditionally show a snapshot in time, July 1 through June 30 of each year. With the high level of interest

in Idaho’s oil and gas production, this report also contains the most up to date information through November 2016.

The Oil and Gas Conservation Commission Annual

Report can be found at www.idl.idaho.gov./oil-gas/

commission/index.html

The State Oil and Gas Regulatory Exchange (“SOGRE”) is a combined effort by the Ground Water Protection Council

and the Interstate Oil and Gas Compact Commission. SOGRE is conducting a comprehensive peer assessment of the

Department’s statutory authorities and implementing regulations. Through this peer assessment by the SOGRE

Assessment Team (“SOGRE Team”), the Department sought to obtain the perspective of other state oil and gas

regulators on Idaho’s regulatory regime, including its statutory authority, implementing regulations, administrative

procedures, staffing, and funding. Team members include:

John Baza, Director, Utah Division of Oil Gas, and Mining.

Cathy Foerster, Chair and Commissioner, Alaska Oil and Gas Conservation Commission.

Matt Lepore, Director, Colorado Oil and Gas Conservation Commission.

Nick Tew, PhD. State Geologist of Alabama/Oil and Gas Supervisor, Geological Survey of Alabama; State Oil and Gas

Board of Alabama.

Mike Nickolaus, Special Projects Director, Groundwater Protection Council.

Carol Booth, Communications Manager, Interstate Oil and Gas Compact Commission.

IDL staff spent a day in July discussing our program with the SOGRE Team, and answering their questions. A draft report

is currently being reviewed, and we are working toward have a final report in time for the 2017 legislative session.

Cover Page of the Oil and

Gas Annual Report

JAMES THUM

OIL AND GAS

PROGRAM

MANAGER

300 N 6th Street PO Box 83720

Boise, ID 83720-0050

Phone: 208-334-0200 Fax: 208-334-3698 E-mail: jthum@idl.idaho.gov

Production in surrounding states-Part 1-Wyoming

Page 6 Volume 3 Issue 2/3/4

Previous newsletters and

additional information can

be found on the IDL oil and

gas website:

https://www.idl.idaho.gov/

oil-gas/regulatory/

index.html

Since the 2010 discovery of gas in the western Snake River Basin of Idaho, much of the interest in oil and gas

exploration and development has been focused on the west side of the state. With the recent submittal of two

applications to drill exploratory wells in Bonneville County, some may wonder why a company would want to

drill so far from the recent discoveries in the state. As is turns out, the proposed wells are actually quite close

to existing oil and gas fields – in western Wyoming! Oil fields were first discovered in the early twentieth cen-

tury in southwest Wyoming. The area of oil and gas production can be divided into two main areas: The

Thrust Belt Province outlined in blue on Map 1, and the Greater Green River Basin depicted on the map by the

red and green areas outside the blue box. Since the initial discovery, over one billion barrels of oil and over 35

trillion (yes, that’s trillion) cubic feet of gas (TCFG) has been produced from primarily Mississippian, Jurassic and

Cretaceous-age sandstones and limestones.

Map 1: USGS Map of Oil &

Gas Production, Southwest

Wyoming. Idaho, Utah and

Wyoming Thrust Belt Prov-

ince is outlined in blue.

Exploration in the Thrust Belt Province actually began in the late-1800s when companies tried to drill wells

around naturally-occurring oil seeps but were unsuccessful. Nearly fifty years passed until the first commercial

discovery was made in the area. In 2013 the Wyoming Oil & Gas Conservation Commission (WOGCC) re-

ported that 35 fields in the trend had a combined total production of 188 million barrels of oil (MMBO) and

11.6 trillion cubic feet of gas (TCFG).

In 2003 the United States Geological Survey (USGS) made an assessment of remaining oil and gas resources to

be discovered in the Thrust Belt Province (see Map 2). They estimated that nearly 39 million barrels of oil

(MMBO), 918 billion cubic feet of gas (BCFG) and 57 million barrels of natural gas liquids (MMBNGL) were yet

to be discovered in this trend. Given the amount of

oil and gas that has been historically produced in this

area, it’s easy to see why companies still have an inter-

est in exploring here. Could the next oil and gas dis-

covery occur in Idaho? Stay tuned!

Map 2: USGS map of the Wyoming

Thrust Belt Province

References:

USGS Wyoming Thrust Belt Province Assessment Team, 2003, Assessment of Undiscovered Oil and Gas Resources of the Wyo-ming Thrust Belt Province: U.S. Geological Survey World Energy

Assessment Project Fact Sheet. Greater Green River Basin - Oil and Gas Geology, Production and Future Development: State of Wyoming Geological Survey, Updated May 1, 2014.

Overthrust Belt – Oil and Gas Geology, Production and Future Development: State of Wyoming Geological Survey, Updated May 1, 2014.